According to the latest ADP report on Wednesday, private U.S. companies hired more slowly than anticipated in August, with most growth concentrated in health care and a few other sectors.
The payrolls processing company reported that firms hired 38,000 workers, which is less than the revised tally of 46,000 in July and below the Dow Jones forecast of 47,000.
Though job creation remained positive, August’s gain was the smallest since January and reflected a broader slowdown in the labor market.
Education and health services contributed 45,000 jobs, leading all categories, with health services driving the strongest employment growth.
Leisure and hospitality added 16,000 jobs, while construction increased by 12,000.
Manufacturing lost 17,000 jobs, professional and business services declined by 16,000, and both natural resources and mining, as well as trade, transportation, and utilities, each reported a decrease of 5,000.
Nearly all the gains originated from large corporations, with companies employing 500 or more workers increasing by 34,000, while those with fewer than 50 employees grew by 3,000.
ADP’s data also indicated that pay increases remained stable for the month. In August, the firm introduced a feature that separates growth into base pay and gross pay, which includes tips, commissions, bonuses, and other earnings.
Overall, for all workers, base pay rose 3.2% and gross pay rose 4.7%.
Dr. Nela Richardson, Chief Economist, ADP, stated in the release: “Pay can tell us a lot about today’s choppy hiring. To understand hiring patterns, you have to look deeply into where pay growth is accelerating, where it’s slowing, and for whom. Once-predictable wage growth has been overtaken by the complexities of demographic change, persistent inflation, and AI’s effects on jobs.”
The ADP report precedes the Bureau of Labor Statistics’ nonfarm payrolls release on Friday, which is expected to show a 53,000 increase following July’s 23,000 decline. The unemployment rate is projected to remain at 4.1%.
By CEO NA Editorial Staff
